GAME PLAN REVEALED: 08/04/2025
Good morning and welcome to your weekly deep dive. In this morning’s GAME PLAN, Gareth Soloway, Chief Market Strategist at Verified Investing, broadcasted while on vacation, proving that the charts never take a day off. Last week ended with a pivotal decline on Friday, triggered by a Nonfarm Payrolls report that not only came in weaker than expected but also included dramatic downward revisions for the prior two months. This morning, the market is attempting a "buy the dip" rally, but the technical landscape reveals a far more complex and precarious picture.
Today, we'll expand on Gareth's analysis, exploring the S&P 500's brush with a 100-year-old resistance line, the growing specter of stagflation, and the disciplined, probability-based setups that separate professional traders from the crowd. This is no-BS, just charts.
The S&P 500: Hanging Off a 100-Year Cliff
The sharp two-day sell-off on Thursday and Friday was a classic demonstration of a market truth: stocks take the stairs up and the elevator down. As Gareth noted, "look at how in two days, the gap up on Thursday reversal and Friday down move, we literally took out everything all the way back to where this trend line was broken." This swift decline wiped out nearly three weeks of slow, grinding gains, confirming the "hanging off a cliff" scenario Gareth had been outlining.
The setup was telegraphed by two powerful technical factors. The first was a parallel channel connecting the October 2023 low with the April 7th low. The upper parallel line, drawn from the 2024 highs, perfectly capped the market's gap-up high last Thursday. On the power of these formations, Gareth emphasized, "parallel channels have more and more meaning to me in technical analysis. It's something that not a lot of people have discovered... the parallels are the ones that are more powerful because the lines are parallel. And that means there's more credence to them."
The second, and far more profound, factor is a trend line that spans nearly a century. By switching to a logarithmic scale, Gareth revealed a line connecting the 1929 pre-crash high with the 2000 dot-com bubble high. Extending this line forward, it precisely tagged the recent market peak.
"Look at what we get right there on the charts," Gareth pointed out. "Right into this level here on a trend line that literally spans almost a hundred years in the making." While this doesn't automatically signal a 1929-style crash, it represents a technical resistance level of immense historical significance. For a swing trader, the implications are immediate. "What I do know is that when you hit key trend lines, you tend to have an immediate reaction. If it's a support line, you're going to get a bounce. If it's a resistance line, you'll get a pullback." The market's sharp reversal is that exact pullback reaction.
The Macro Puzzle: Stagflation's Shadow Looms
The market's technical weakness is unfolding against a troubling macroeconomic backdrop. Last week's data painted a picture that should concern every investor. On Wednesday, the Federal Reserve struck a cautious, almost hawkish tone on rate cuts. On Thursday, PCE inflation data showed a year-over-year uptick. Then, on Friday, the weak jobs report signaled a deteriorating labor market.
When you combine these elements—rising inflation and a weakening economy—you get the recipe for a toxic economic environment. "The key here is when you have upticks in inflation, but a labor market that is starting to come down, what does that mean? It means potential stagflation," Gareth warned. "Remember that term. That is not a good term net net for the overall markets."
This narrative is being confirmed in the bond and currency markets. The 10-Year Treasury Yield, which was coiling in a tight wedge pattern, broke down decisively on Friday's jobs number and is now near 4.2%. The move was so significant that the Fed Watch Tool, which showed no rate cut expected after the Fed meeting, now has a September cut back on the table. From a technical standpoint, the yield may experience a short-term bounce in what’s known as a "retrace to the scene of the crime"—a move back to the broken trendline before heading lower.
Meanwhile, the U.S. Dollar Index (DXY) is also showing weakness. It has been trading within a well-defined downward parallel channel since January 2025 and recently tagged the top of this channel just above the 100 level, where it found resistance and is now pulling back.
Corporate Narratives: Price Hikes, Pay Packages, and High Bars
Individual stocks are telling their own stories within this broader market context.
Tesla (TSLA): The stock is trading up around $310 pre-market after shareholders approved a $29 billion pay package for Elon Musk. While this is dilutive to shareholders, the market is betting this will refocus the visionary CEO on Tesla's core business. The chart, however, tells a story of coiled energy. Tesla is consolidating in a massive wedge pattern. "Wedge patterns, again, you can see the bigger move here, smaller, smaller, smaller, right? So it's a compressing spring. The question is which direction does it break out?... Whichever way we break, just be warned, it is likely to be a big move in that direction."
Spotify (SPOT) & Netflix (NFLX): Spotify announced it is raising prices, a move that the market initially cheered. However, Gareth provided crucial context: "once companies start to struggle gaining subscribers, oftentimes they turn to raising prices. We've seen this with Netflix." This observation connects directly to Netflix, which has pulled back substantially and, in a telling move, announced it will no longer report subscriber numbers. This lack of transparency often signals a lack of confidence in future growth. For Spotify, while the stock is bouncing off technical support, a prime shorting opportunity may be approaching. Gareth identified a key resistance zone between $700 and $705, a level that combines gap fill with a major breakdown pivot.
Palantir (PLTR): With earnings due after the bell, Palantir serves as a perfect lesson in managing expectations. The stock has rallied immensely into the report. "Remember, folks, when a company beats on earnings, it doesn't mean the stock goes up," Gareth cautioned. "The higher it goes into earnings, the better the results have to be. So a beat is just not enough at this point on some stocks." The bar for Palantir is incredibly high, and even a strong report could trigger profit-taking.
Bitcoin and Precious Metals: Retracing to the Scene of the Crime
The concept of retracing to the breakdown point is a recurring theme across multiple asset classes.
Bitcoin (BTC): After accurately identifying the recent consolidation as a bearish bear flag—not a bull flag as many claimed—Gareth noted the subsequent breakdown. Bitcoin found initial support over the weekend right at a previous high pivot around $110,800. It is now getting a small bounce, but the key test lies ahead. The "scene of the crime" is the underbelly of the broken bear flag, which now acts as major resistance around $117,000. A failure at this level would signal the next leg down, while a decisive move back inside the flag and above $120,000 would be needed to neutralize the bearish pressure.
Gold (XAU/USD): The yellow metal is exhibiting a nearly identical pattern. After breaking down from a large wedge pattern, gold is now bouncing back toward the breakdown point. This creates a significant resistance level just above $3,400. Until gold can reclaim and hold above a level like $3,420, the path of least resistance remains a rejection from this trendline and a continuation lower.
Silver (XAG/USD): Silver pulled back sharply after hitting a long-term resistance trendline dating back to 2022. It is currently holding a support zone, but it's not yet a buy. The risk is that it forms its own bear flag before another move down. Gareth is patiently waiting for a potential entry at a much stronger support level around $34.65, which represents a retrace to a major breakout point from earlier in the year.
Energy Markets: Breakdowns and Bearish Patterns
Crude Oil (WTI): Oil continues its breakdown, with Gareth having shorted the commodity with Smart Money members. The fundamental pressures are twofold: reports of OPEC raising production to squeeze U.S. producers, combined with a weakening U.S. economic outlook that dampens demand. Technically, oil has minor support around $65, but a break below that level opens the door to a target of $60.
Natural Gas (NG): The natural gas chart presents one of the most ominous patterns. It is testing a key support trendline for what Gareth counts as the fifth time. Multiple tests of a support level weaken it, and a breakdown becomes increasingly probable. Compounding this is a potential head and shoulders pattern (shoulder, head, shoulder). If this bearish pattern plays out to its full measured move, the target is almost unbelievable. "Where does NAT gas target? Basically down to a dollar," Gareth calculated. While not a guarantee, the implications of such a price collapse for the U.S. economy would be profound.
The Trader's Mindset: Translating Probabilities into Profits
Throughout the analysis, the most critical lesson was not about any single chart but about the mindset required to navigate them. Gareth describes his role as translating a foreign language for investors. "I look at the charts as being a foreign text, right? So my job to you guys... is to translate this into words that we all understand and talk about resistance and support and give you guys the playbook of what the foreign text says."
This translation is rooted in probabilities, not predictions or gut feelings. It requires immense discipline. "As a trader, I miss hundreds of trades every day," Gareth admitted. "All that matters is that a few come and hit my levels and I get them. That's it." This patient, selective approach is how a trader can achieve a high win rate over the long term. By focusing only on setups with a 75% or higher probability of success, you can reach what he calls the "profit land."
This discipline is the only defense against the market's greatest threat: your own emotions. "The institutions know. They know exactly the buttons to press to make you... overreact and act emotionally, to FOMO in at the highs, to FUD at the lows," he warned. "Our only option is to keep that emotion bottled up when we're trading and investing and go to the charts."
Conclusion: Navigating a Market at a Crossroads
The market is at a critical inflection point. The S&P 500 has been rejected from a resistance level of historic proportions. The macroeconomic winds are shifting, carrying the scent of stagflation. Across asset classes, from Bitcoin to oil, clear technical patterns are dictating the probable paths forward, with many assets now testing their breakdown points as new resistance.
Navigating this environment successfully has little to do with being bullish or bearish. It has everything to do with being disciplined. It requires the patience to wait for high-probability setups, the humility to respect key levels, and the emotional fortitude to follow the unemotional language of the charts. By adopting this probability-based framework, traders can find clarity and opportunity, even as the broader market hangs in the balance.
